Posted by
Dave Perkins on Friday, May 11, 2007 11:51:25 AM
I saw a story on cnnmoney.com today which purported to offer solutions to high prices at the pump. Among the solutions proffered in the headline was 'increase taxes'.
Now he had me hooked. How would an increase in taxes on gasoline, carbon, oil production, whatever, cause pump prices to decrease?
Turns out the author admits, in his own story, that a tax increase would not decrease pump prices, not least because it would RAISE those prices.
"economists say the most efficient way to reduce demand ... is to make it more expensive."
Well, duh. But how does that help the consumer?
"Now this might not bring prices down at the pump."
Actually, it will increase them.
"but it would most likely reduce demand, thus lowering wholesale prices and the profits currently reaped by oil companies and their shareholders."
So how does it help you, the consumer, if you are forced to use less gasoline because it has become prohibitively expensive? And how does it help you if the oil companies make less money?
It doesn't, of course. It might make some liberals feel better, stick it to the man and so forth. But it doesn't help our economy. And "their shareholders" include many millions of ordinary people who have pension plans which purchase and hold oil company stocks.
So if you're somebody who might perversely enjoy "sticking it to the man" by cutting the profits of the evil oil companies, consider your own pension plan, and ask yourself the serious question-- am I damaging my own retirement? If you support leftist tax-increase policies on oil companies, windfall profits taxes or carbon taxes or production taxes, that's exactly what you're doing.
And even if your own retirement doesn't invest in oil companies, what right do you have to damage the retirements of millions of hardworking non-rich Americans just because you're offended by how much money the oil companies make?
The more retirement plans are stressed by government-caused stock price decreases, the more people will be on government assistance in their later years, and the higher taxes you will pay, on EVERYTHING.
But here's my favorite part--
"The tax revenue, presumably, would be returned to the public for its own benefit, perhaps in the form of better mass transit, cheaper health insurance, or gasoline tax credits for poor people."
Even this guy can't posit this with a straight face. He had to put in the word "presumably".
And remember, the government has an overhead of about 72%. So anything 'returned to the public for its own benefit' is a sad shadow of what it was when it was TAKEN from the public.
There is nothing more expensive and less efficient than government. That is the LAST solution that should be applied to any problem.
Having tried to make the case for tax increases on oil companies as a way to, indirectly, over time, reduce demand, the author feels compelled to point out that "people representing a wide variety of interests are open to this idea". Of course, he doesn't go on to tell us who they are, or what wide variety of interests they represent.
I'm figuring it's everyone from the far left to the extreme far left, a nice wide variety.
To his credit, the author goes on to quote people who say it's unlikely that anything with the word "tax" will ever be accepted by the public. His source, though, adds "and that's a pity".
There's that wide variety of interests again.
After exhaustively cheerleading a tax increase, the author moves on to his number two notion, increasing efficiency mandates on the car companies. Our car manufacturers are on life support already, and now they should have to increase their mileage by 30%, in the opinion of Mr. Hargreaves.
If you're starting to see a pattern of proffered solutions which all involve government action, you're onto something.
Number three on the solutions list is "mandating biofuels use". The old "alternative fuels" thing.
Never mind that biofuels cost more than gasoline and require manufacturing changes for automobiles to use them... and never mind that these facts do NOT point to lower pump prices... it's a government action, and that's good enough for Steve.
We finally get to supply sider economics at number four on the list of solutions, 'require companies to increase gas production'. He believes, apparently, that the oil companies are conspiring to hold back just enough product to increase the prices at the retail level.
But we all know that liberals have put an end to refinery expansion and building, on environmental grounds. This author proposes that refineries simply operate at increased capacity, as if the 97 to 98% capacity of today just isn't enough.
Number five on the solution list is 'build a gasoline reserve' like the national petroleum reserve. He immediately admits that it would be nuttily expensive and difficult. And don't forget, that national petroleum reserve only keeps the wolf out for 1-2 days.
Finally, the sixth item on the list approaches the real problem-- oil prices per barrel are too high because there's too much demand and too little supply. So let's drill for more oil, in America!
Not gonna happen, says Steve's source, because 'people will oppose us expanding production anywhere".
Well, yes and no. Some oppose increasing American production, but on the same grounds as they oppose refinery expansion. They are leftist environmentalists. They complain about high gasoline prices but do not support any workable solutions, preferring instead to try to make us believe the oil companies are evil and deserve to be taxed heavily, that'll teach 'em, how dare they charge so much for their product!
But I"ll wager the locals in some third world countries would give their right arms to get someone to come and produce oil, to employ locals in high paying jobs, to add to the tax base for these countries so they can have more money to spend on public projects, to improve their standard of living.
Liberals, of course, think none of these things should happen. They do not believe these people should have the human dignity of earning their living. They prefer that third world citizens should remain impoverished, so that liberals can have rock concerts to raise awareness for their plight, and to blame Bush for not donating enough to their cause.
The liberal solution is rarely an actual solution. It usually costs you even more, even while acknowledging you're paying too much in the first place. And it usually requires a villain for you to hate, so you'll accept his punishment on the grounds that he had it coming to him.
Never mind that punishing a manufactured villain does nothing at all for you. It doesn't reduce the price you pay or increase the supply of a needed commodity. But don't you feel better, now that the bad guy got what's coming to him?
Me neither.